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Worldwide Exchange

Ross Westgate and Kelly Evans consider the business stories that have global significance.

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Ukraine 81, U.s. 38, Crimea 30, Us 24, China 18, Imf 14, Warren Buffett 9, Spain 9, Europe 9, Nato 9, Brussels 8, Eu 8, Moscow 7, Gazprom 6, Steve 6, John Kerry 5, Lifelock 5, Omaha 5, Geico 5, Hsbc 4,
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  CNBC    Worldwide Exchange    Ross Westgate and Kelly Evans consider the  
   business stories that have global significance.  

    March 3, 2014
    4:00 - 6:01am EST  

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welcome to "worldwide exchange." i'm julia chatterley. these are your headlines from around the world. shares in moscow off by nearly 10% as the country's central bank hikes rates by 150 basis points. european markets under pressure following lot losses in japan overnight. u.s. futures pointing to a lower open on wall street. in the next hour, european foreign ministers meet to discuss how to react to russia's premier. moscow, brussels with all the
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latest developments. and in two hours' time, warren joins cnbc for an exclusive interview to discuss a record year for berkshire hathaway. get involved by #askwarren. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. well, the crisis in the ukraine and russia's involvement, the total dominating factor for markets this morning. you can see in the last few minutes, stronger pmi from germany and from france. but the market is still in negative territory this morning. let me give you a look at how the individual markets are performing this morning. the german markets down now around 2%. they were down around 2.5% earlier, but stronger than
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expected pmi numbers coming out. the french market down 1.5%. let me give you a look at what's going on in the foreign exchange and the commodities markets. euro/dollar lower by around 0.2%. the yen and the swiss this morning taking dollar/yen down by 0.4%. gold higher. key concerns of supply concerns of energy based on the idea that we could see sanctions on russia. obviously, we're waiting today for further news on just what action the west is going to take. but right now, we're seeing brent and u.s. crude higher in trade this morning. the dow is down around 0.8%. we've got dollar/ruble trading at five-year highs. i mentioned those actionses and the potential oil impact, gas
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impact. gazprom one of the key losers for the russian market. we've got a broader impact as far as the russian markets are concerned than what we're seeing in poland, as well. so the real dominating factor is the ukraine. thousands of russian troops are focused in the crimea region following a dramatic weekend in the ukraine. this is a declaration of war by vladimir putin. u.s. secretary of state john kerry condemning russia's actions and will travel to kiev tomorrow for talks with the new ukrainian government. >> president putin is using force in a completely inappropriate manner. fears he's going to lose on the international stage. russia is going to lose. >> steve, it's the one possible benefit of seeing russian aggression here, but actually,
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it could boost popular support for the new ukrainian government. >> i'm not sure about that, julia. i think this is a country that's split top to bottom, east to west, north to south. the russians invaded crimea. it is the russian troops in force with a lot of military hardware. because they said and putin said with the backing on the russian parliament they were defending the interest of russian speakers, just to remind viewers, crimea was russian. 58% of the minimum of the population believe themselves to be russian. it's a similar story in the east of the country, as well. i don't know if you can hear behind me, we've got pro government demonstrations behind me and pro russian
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demonstrations behind me. elsewhere in the country, we've seen violent clashes, raising the russian flag, as well, storming regional assemblies, having scuffles with pro russian supporters. i would suggest that, yes, these action ves brought out pro russian supporters and they've brought out the -- what russia's ultimate aim is i think everyone wants to know and whether there's going to be an escalation on the east. we've been speaking to many people here, the politicians and indeed members of the national defense council. and i spoke to one of the representatives of that council, deputy summer somer about the intentions of the russians. let's just listen in to what she thought. >> we understand that this is main goal of the russian army to -- ukrainian army to have its own country. but just now, we don't have any
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cases with -- where our on -- >> do you fear that there's going to be an escalation of the conflict area outside of crimea to, perhaps, eastern ukraine, for instance, which has a lot of russian support, we're told? >> so dangerous of escalation is very high. but ukrainian government try to keep the situation and our message for all ukrainian army to give the people. we understand that we are doing everything without armed forces. >> do you consider russian actions so far to be a declaration of war by russians on ukraine? >> yes.
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we can see the decision of the russian parliament and we can see act on the ukrainian territory in crimea. >> what they're saying here is the actions on the ground that have been a declaration of war. we've had a mobilization of regular forces, a possible mobilization of reservists. i spoke to one person today who said they could put 700,000 men under mobilization if there was a full call out. the country needs support from the international community. it needs nato support. the same lady i was talking to there, ms. sumar, said we need nato support, we need international support from the eu and the imf.
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but the chance of the imf coming to kiev later in the week is still ongoing. we understand the imf is twice in the last few years has support. indeed, yanukovych's government. the imf is skeptical about putting more money in unless the terms are agreed to with this. with policies to abide by those terms but which we've heard today and it would be a -- government, because admitting to those and agreeing to those lead to a lot of unpopular decisions being made. back to you. >> joining us, the managing director at temokov intelligence.
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well, if you have a decree lakted move by putin here. but you said all along, you don't expect to see an escalation of violence in this crisis. what do you see as the big risks here? will putin continue to push into the south now? >> well, first, the big risk is ukraine. the weapons elsewhere in the other part of the country. so there is the risk of local -- and song on. we can't rule it out. but in terms of an open conflict, putin has already -- is already consoling the fact of crim crimea. by in from the other side of the border. but there is no interest on this side of russia at this point to push it further. i think at this stage, everybody
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is on the wait and see. diplomacy is now leading the air force. but this is expecting to deploy troops i'm afraid mistaken. >> do you think the ukrainian government is with the situation, they're calling for people not to react to what's going on there as far as russian troops are concerned. but are they in control enough, do you think? >> they're struggling to keep control in that part of the country. from kiev's point of view, it's all about restraining at this point.
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heading to moscow with the russian government, as well. >> the concern is that that would actually inflate the domestic population. they already have issues with her and her former em boldment with moscow. when you're looking at moves going on in the russian market, how concerned are you? >> it's making the market cheaper. we like to say that for those who are long-term, this is going to present a interest opportunity. but i must admit that it's so fluid that there's no rush for anyone who doesn't have to have any emerging market exposure. but the situation is so fluid and we have to look back at
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history and you have the situation with georgia and look at also the fact that all this is -- we're still dealing with the institution of iraq and sort it out which border is whom. the berlin wall about five years ago, so the interest of china is also, i think, in fact, they had the russian seal on central asia. >> so you're saying they stand with the russians and agree with their point of view on this? they've made it very clear how they feel which is a crucial part for japan here and how they react to this situation. what about the idea of sanctions, though, from potentially the u.s. or the europeans? how much of an impact do you think that's going to have on russia? because, of course, it's a key energy reliant situation going on in there, with the move in gazprom this morning. >> i'm very comfortable with double standards in general. so when i hear the u.s. and the west saying something about
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syria or lydia, i don't like that. but it could be painful. russia is a big country. it's one on of those small countries like syria, for example, or iran where they can just import sanctions and it's going to crumble. but it's going to create a lot more risk premium to go from there to now. that's where we are. >> and we're seeing this in the market today. we'll come back in here. what should the international community do and what can they do? two very different questions. >> in terms of what they should do, we are seeing the beginning. we are seeing now more concerted effort by global leaders. i think that we can in terms of denouncing the russia move. we're seeing obama first, we're seeing nato in the weekend, we've seen the g-7 leaders this afternoon.
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the west is not in ministry to the ground. financial support. this crisis, actually, makes the -- of the imf package more higher. and essentially faster, as well, to come in. >> exactly. >> managing director, thank you so much for talking to us. thank you, too. now, be sure to head over to cnbc.com for a live blog of the latest developments unfolding in the ukraine. now, global leaders were quick to condemn russia's decision to put troops on the ground in the ukraine. on saturday, president obama spoke to vladimir putin on the found for 90 minutes. u.s. president is said to have told putin there would be serious repercussions if he does not stop military operations. the discussion was said to be candid and direct. european foreign minister res to
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meet in brussels where nato a leading criticism of the kremlin. >> we call on russia to de-escala de-escalate tensions. we call upon russia to honor all its international commitments, to withdraw its forces to its bases and to refrain from any interference elsewhere in ukraine. we will be using every possible diplomatic channel to make clear our concerns and to seek clarification from russia of its intentions and to ask for a de-escalation for all concerns. >> for information that russia has refused to participate in negotiations and consultations within the confines of the memorandum. we've seen an invitation out and initiated that.
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the u.s. and britain are ready for such consultations, but russia rejets them. >> today in brussels, eu foreign ministers will meet to discuss the situation in the ukraine at 11:00 cet. carolin roth is on the ground waiting for them to arrive. for all the discussion that happens today, what actually can they do? >> you raise all the right points in the discussion, julia. we saw that in the g-7 statement, the pulling out of the g-8 meeting in sochi in june. but beyond that, the options for the eu, at least, are very, very limited. key point here is the energy dependance on russia. they get one-third of their national gas from russia. if they impose any economic sanctions, they face serious retribution from russia. and the bigger question here, julia, is does russia even
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respond to the threat of economic sanctions? if you go back to russia invading georgia back in 2008, the west threatened sanctions, but putin very much deflengted that agitation from the west. in the end he got what he wanted. that was the an exation of two regions in georgia and that could suggest he's going to go with the same strategy this time around. having said that, one thing is a little different from back in 2008 and that is oil prices have been trading at a $30 premium, a discount, rather, than writ was in 2008. also, the economic fundamental res very weak, russia potentially sliding into a recession later on this year. and we saw significant weakening of the ruble against the euro and the dollar. so maybe, maybe the eu does have a greater economic leverage than it thinks. back over to you, julia. >> that's a great point, carolin. whether that could be a potential tool for them here to challenge them.
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we'll catch up with you a bit later in the show. now, let's get a quick look at the asian markets, of course, too, because that sentiment concern about the ukraine and what's going on as far as russian troops are concerned certainly impacting sentiment across that market, too. the only one that managed to hold in the green in the session, we saw manufacturing pmi data coming out at 48.5, much weaker below that 50% level, but in line with expectations. but all about sentiment right now surrounding russia. and we'll be moving further into those weak manufacturing figures from china coming up right after the break. stay with us.
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hedge fund managers george soros and john apaulson are bot looking to spain for their next investment. span ya announced plans last week to list on the stock exchange and will operate as a real estate investment trust or a reit. stephane pa drazis joins us now.
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>> well, for sure. on the site of this conference, they're going to talk about a situation in ukraine. but as you say, the main topic of this concern is to promote the spanish economic recovery. the one that you mentioned just before about the property market in spain and the construction sector, yes, it's the moment between this and this company. at least it's what george soros and needs to think about about the situation. nevertheless, we are not out of the wood yet. if you look at the forecast for the spanish construction sectors, all these countries are targeting an increase of their revenue this year, but only thanks to international projects. one of them, acs, clearly says that international expansion was the top priority for this year. in spain, the situation for the construction sector remains very weak and the domestic market. there are still some interesting signals for the first time in five years. the spanish spending in public
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works will increase this year. so that's something positive for the construction sector, but probably not enough to boost earnings for this companies this year. still, under construction, troops are still very reliant. they rely very much on the spanish markets. it's 58% of the revenue for s.e.c. and 47% for scioscia. that being said, apart from that story in the property sector, this point of this conference here is to promote the recovery. as you know, julia, at the end of last year, the spanish economy went out of recession. there are, of course, a lot of clouds over the spanish economy still. the unemployment rate, 26%. the public 7% of gdp for 2013. that's an estimate. we'll talk about the situation in spain and, of course, about the situation in ukraine with joaquin almunia. moving on, north korea fired
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two more short range missels after launching four short range rockets last week. the news agency said the missiles likely flow about 500 kilometers. the firing comes days after the u.s. and south korea picked up their joint military exercises, too. now some relief finally for thailand, voting in elections in five provinces went off smoothly. there are no reports of violence at sunday's vote after voting was -- during last month's general election. meantime in bangkok, hundreds of demonstrator decamped from an intersection in the capital moving ta lakeside camp. there was a total appreciation for bangkok residents with the inconvenience of the protests since last november. one of our main concerns is
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hsbc's final -- for february fell to a seven-month low in january. eunice yoon is in beijing. eunice, it was pretty much in line with expectations. but it's just another data point. they are rebalancing the economy. >> oh, absolutely. a lot of people have been talking about how this set of numbers on the one hand affected by the lunar new year and it has seasonal factors. but really, on the other hand, they reaffirm the fact that we are seeing weakness in the manufacturing sector. it really is another data point in the whole concern about china's economic slowdown and the back drop that that provides for the leadership which is going to be convening this week. the thousands of people are going to be coming from all over the country in order to listen to china's new administration talk more about their reform agenda. people are hoping to hear some hard targets in terms of
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economic growth. people are hoping to hear the -- some more details on the -- on the money numbers, as well, the m2 numbers. but overall, what people are hoping to see is some clarity on the policies that had been outlined by this administration in the past. as well as more indication of just how quickly those reforms are going to take place. julia. >> eunice, can i also ask you about the apparently separatist that we saw, attack that we saw over the weekend whether or not security arrangements have been stepped up ahead of the people's congress this week? >> well, the security situation has stepped up in the run up to the national people's congress, but that is something we always see at this time of year in beijing. there is more of a police presence, but at the same time,
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we also have been hearing that out in the far -- in the southwestern city of on kumning where the attack had taken place, the -- there is a greater police presence there, especially in some specific public areas. the public reaction has been one of outrage that this could happen, that terrorists need to be taken down. and, in fact, the government has said once again that they would make sure that these -- the people who are responsible would be -- would actually find justice in their eyes in the end. >> eunice, so great to talk to you. we'll continue the discussion later on in the show. still to come, britain's foreign minister says russia now has operationat control of the crimea region. stay tuned. we'll be heading out to moscow.
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so the crisis in ukraine hits markets hard. european markets are under pressure following loss necessary japan overnight. u.s. futures point to go a lower open on wall street, too. in the next half an hour, european foreign ministers meet
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to discuss how to react to russia taking control of crimea. we're live in brussels with all the latest developments. and in an hour's time, warren buffett joins cnbc. get involved using #askwarren. the situation in ukraine dominating market moves this morning. we see the european markets continuing their descent. the xetra dax down over 2%. the ftse 100 down 1%. we saw a brief move off the lows earlier on that larger than expected pmi move this morning. still, significantly lower this morning. the russian markets seeing most selling pressure this morning down over 8%. there are a gain off the low these morning around 10.5% in trade earlier this morning. quick check as far as the
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foreign exchange markets are concerned. the dollar seeing that flight to quality bid this morning. similar stories for the yen, as you can see. dollar/yen off by around 0.5%. five-year highs for that dollar/ruble rate. euro/russia all-time highs in that exchange. to bring you up to date, thousands of troops on the ground following the issues in the ukraine. the country saying this is a declaration of war by vladimir putin. u.s. secretary of state john kerry has condemned russia's actiones and will travel to ukraine. >> president putin is using force in a completely inappropriate manner that will invite the -- fears auto going to lose on the international stage, russia is going to lose, the russian people are going to lose.
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>> jim maceda joins us from moscow. a "new york times" article quotes angela merkel having had a telephone conversation with vladimir putin saying she's not sure he is in touch with reality and he is in another world. what does this mean for an escalation of the situation here, do you think? >> what it means is we don't know what will happen next because we can't really anticipate what putin will do. putin is a product of the cold war. for him, no matter how you try to convince him otherwise, anything west of ukraine is enemy territory for him. and he in his own mind is seeing nato creeping up ever so closer -- or closely to his boarders. now, you mentioned secretary kerry going to kiev. that hopefully will calm the waters a little bit, at least keep kiev from doing something
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unintentionally or that unintentionally as ka lates the situation. but it is now true that the west has mobilized at least diplomatically against vladimir putin's military takeover of crimea. as you say, it's not firmly in his hands. that it's really, julia, unclear what the west can do about it. putin doesn't seem to care very much or is worried very much about international reaction. in terms of sanctions, first of all, not attending the g-8 summit in sochi is strictly symbolic. it's just a meeting. economic sanctions sound good on paper, maybe, but the u.s. has little economic leverage over russia. while eu sanctions might have teeth, europe, of course, is reluctant to go there because they're worried about putin shutting off the gas taps. a military option is not even on the table. so all this while the west has so few options, putin,
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meanwhile, in or out of touch with reality is saying that he has every right to go even further, to go into the eastern pro russian part of the ukraine if he believes that russian interests and lives there are threatened by these ukrainian ultra nationalists and this is so far absolutely no indication, no evidence that these pro russian people living in that part of ukraine are under threat. so in soum, the next few days will truly be nail biters. >> thanks, jim. stay right there. i want to give you some breaking news this morning. we're seeing ukraine's border guards gather at the crimea ferry crossing. also quote on dow jones that the russian navy deployed from the port of sevastopol. russian force res taken control of several units, so on continuing escalation of the push it seems by russian authorities here.
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jim, i just want to ask you a quick question. you are saying there's nothing that seems to move putin as far as sanctions are concerned. do you expect him to move quickly, then, if he's going to push east or south, given that he has an advantage at this stage where it appears that the west have very little they can do to persuade him otherwise? >> yes, i think he will want to move quickly. he's somebody who likes to, as they say in israel, establish the facts on the ground and then have the international diplomates, then, deal with that new situation. these -- the build up that you have mentioned inside russia, if you were to ask vladimir putin about it, he would say that's part of the ongoing war game that's we launched five or six days ago. we're now at march 3rd. this should be the last day of those war games. it will be interesting to see if he pulls back his 150,000 troops, his 200 war ships and
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900 tanks that he launched five days ago to be part of this mobilization, testing troop readiness, he says. if they don't pull back, then that will be an indication that he has other things up his sleeve. >> thanks, jim. great to see your perspective this morning. also perhaps immediate reaction as far as the pressure we're seeing on gazprom prices, down over 10%. the company is studying the possibility of gas prooi price hikes for ukraine after the first quarter of this year. so already the pressure, the immediate pressure gained pressing on the ukraine as far as the gas reliance on russia is concerned. so how much of a threat is the
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situation on ukraine on europe's corporate sector? this is what two members of cnbc's council told us earlier. >> from a geopolitical point of view with the crisis in ukraine, for my business, it's all about what does it do to commodities and foreign exchange and the volatility. we're very short dollar and fuel and so we've got a complex hedge with strategies in place to cover that. for me, that's probably the most important thing. >> today's events are bringing more uncertainty. and two, what is a fairley farther game european recovery. >> now, allen miller founding partner at scm private. certainly the situation in ukraine and russia dominating investor sentiment in trading today. how much more selling pressure do you think these markets could see here?
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>> in terms of emerging markets, russia is about 5% or 6% of the index. if you're mad enough to follow these stupid contests and those stupid funds and investing in random countries, then it's 15% or 20%. in terms of europe, what we've seen on a much broader level is a lot of earnings disappointment. and if we look over the last month, for example, the rates are downgrade the european stocks have been nearly double the average emerging market stocks. so you have to put everything into cop text. where is the value, where is the growth, where is the opportunity? and ukraine is relatively minor in the context of either europe or ee emergencying markets. >> but it's a huge, more broad than the ukraine. we've got russia involved here, the u.s. going to kiev to talk about this. in terms of the geopolitical risk event for markets here, particularly given what you say in the lack of perhaps fundamental underpinnings for the markets here, is it time for broad investors to perhaps look
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at some short opportunities in the market? >> well, the way we work is we look at the immediate and long-term. what this shows is the power, if you like diversification. you don't know what's going to happen tomorrow. you don't know what's going to happen with russia and ukraine and how it's going to pan out. the safety is to have a spread of assets, not just funds, not just equities, in different markets, different size of companies and, therefore, you spread your risk. there's a lot of people who have been saying russia is incredibly cheap. and it is, but can you stomach the volatility? the only way to stomach is to have a nice -- >> and what about the u.s. markets, do you expect to see a bit of a pullback as we get into this afternoon this afternoon, too? >> i think the futures are showing a 0.75% decline.
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u.s. valuations are not particularly cheap. complimentary europe is starting to look ominous because you've got all these downgrades. you have all the fund managers piling money into this area. meanwhile, you're seeing selling stocks. those three combinations are not normally a positive mix. >> and you're calling one of the most consensus trades out there on european equities right now is ominous. >> i think it's ominous because you have a direct selling underlying on these downgrades and you have reasonably strong eye valuations. it's not a good substantiation. >> we are asking a broad sell-off here. where would you see a good opportunity for investors to perhaps get something more cheaply shorter term? everything has been dragged at the same pace. >> you say there's been a broad
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sell-off. compared to the end of the year, most markets are actually flat. bond markets have gone up as people gave up on bond markets. and gold has gone up. gold was everybody's bear and that's gone up 10%. and it's interesting to think where is the next one where everybody is -- that must be emerging markets. >> allen, you're going to stay with us, so stay right there. but be sure to head every to cnbc.com for a live blog of the latest developments unfolding in the ukraine. you can get access to the latest information online, too. now, fast retailing, the operator of unico apparel source have its same-store sales climbed in february from the year before. makiko has the story live from tokyo. >> it was the fourth consecutive month that sales had improved on the year. and the number of customers had to declined 4%. but the average spending per
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customer was up r5 5%. sale of winter items have been strong due to cold weather. friday, the firm was in talk toes buy j. crew for about $5 billion. fast retailing has declined to comment on the matter so far, but market watchers say if the deal does go through, fast retailing could gain a foothold in the american market on a foothold it's never seen before. speeding up its expansion overseas is a possibly for the first. the uk index continues to fall for the fourth straight day. that's all from nikkei business report. back to you. >> now we're just getting some comments from the imf's chief lagarde this morning. she's at that spanish conference looking at how they boost spain's growth. she's saying further monetary easing is needed in the eurozone.
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that's the message we've heard from her several times, time and time again. labor product reforms may help eurozone growth. reforms are paying off for spain as far as she's concerned. we're seeing a boost in confidence, but creating jobs must be the overriding focus now for spain, including deeper labor market reform. comment, too, on the debt load in spain. they must lower their debt load. no comments so far as the situation in ukraine is concerned. i'll keep you abreast of any further comments she makes there. let's get a look at what's on the agenda in asia tomorrow. australia's central bank meets. the rba is expected to keep rates on hold. we get an update on g4 current account data and some corporate earn eggs out of greater china. soho china and financial firms haitun dw international. still to come on the show, we'll get back out to kiev shortly for the latest on the ground from steve there. stay tuned.
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i'm showing you images of the british foreign minister william hague. he's just arrived in kiev. he was actually speaking earlier
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this morning saying that actually russia has taken operational control of crimea. he's very concerned about the possibility of them pushing forward or into the east or southern regions in crimea. he said of course russia is entitled to have his troops and naval forces at its base in crimea, but they need to remain within those bases. we'll bring you more comments he makes as we move forward. china's factory activity level shas slowed. the reading on output and new orders contracted for the first time since july 2013. this follows a fall in the official pmi figure, which contracted to 50.2 in february from 50.5 in january. so at least as far as that figure is concerned, it remains above that key 50 level. the hsbc one, of course, didn't. now, senior economist from
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mizuho bank joins us now. the unemployment or employment component and the new orders are very concerning, but just how concerned are you about this? and particularly there's a number of weaker data points. >> well, i think for china, the recovery, especially externally led recovery is going to be pretty strong. it's not going to be as strong as it used to be. it's going to be pretty subdued. whereas i think we shouldn't get too alarmed. for one, we need the sector in. the lunar new year seasonality probably hasn't washed out completely yet. so far, the data points are similar to what we had last year. so we can assume that it's going to away bit on of a wobbly, bumpy recovery on the external sector. we are fairley considering that china has enough policies to affect very, very targeted infrastructure programs. >> so you don't expect officials to be concerned about some of these data points? because this is what you get, isn't it?
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this is what happens when you restrict lending practices and you allow the structure of rates to rise. it's going to have an impact for manufacturing activity. >> absolutely. i think you nailed it on the head. something has got to give. in this case, we are seeing that some of the domestic policies or some of the trade during the reforms are coming through quite negatively at a time where external demand is not picking up strongly enough. so i think china is acutely aware that the domestic offset is not strong enough. so there will be some tradeoff. but in the meantime, i think what the data do tell us is that china is not going to embark or launch a practice tightening. so that kind of fear can be put aside for now. so that's the silver lining, i suppose. >> so how does this feed into the people's congress that obviously taking place later on this week. we're expecting them to perhaps lower or stop on their growth estimates. what else can we expect? >> i think personally we're expecting they're going to probably retain the 7.5% growth
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target. i don't think they're going to deviate too much unless they buck market. one of the things they're going to go about, they're going to say reforms are going to be targeted. at the same time, they're going to take a medium term view. so while, you know, behind closed doors, i don't think they're going to let all their main concerns show through their official statements. i think we want to make the point that they're very, very focused in the reforms that they're undertaking, financial deregulation, moving to its consumer base and i think a bit more quality growth. so those aspects will be what will come out of the headlines. but i think we can expect that china will be very wary, that they need to deal with this in a delicate manner so as not to extinguish the soft recovery the manufacturing takes up a big portion of the economy. >> great to talkyou this
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morning. thank you for speaking with us. thank you. >> allen is still with us. we have to get away from this fixation on 7.5%, 6.5% as far as china is concerned. you point out that we're seeing a transfer of crash into european equities into the chinese mainland here. >> if you think about it, the chinese markets are nothing. the underlying companies, which is what you actually invest in, when you buy a chinese company, you don't invest in chinese gdp. you invest in the companies. the forecast r forecast for us average china maybeland company has changed over the months. but the average forecast has fallen by 6%. so here, you have an opportunity to buy completely out of -- of the world. the average company quoted in mainland china is growing its earnings close to 15% in the current year and you're paying
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just 8.5 times earnings. the reason that's an interesting combination, like everything, you've got to put everything into context. we put 2% of our -- into mainland china in an index which itself comprises 300 stocks. so you don't have to worry about one particular stock if the largest stock is just 3% of the index. so everybody gets obsessed, whether it's 6.5%, 7.5%, whatever percent. but actually, you're investing in companies. you can't currently invest in the gdp index as far as in the west. >> the perspective point that you make, if we look at what's going on in the broader emerging markets, ukraine we're talking about all morning, thailand is still an issue, venezuela, argentina, perhaps the risk, there's still a domino effect that we've seen in the emerging market, irrespective of how much die vergence or differ the enation we see on the markets right now.
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>> there's a impact on western companies. look at germany. look at those large german companies. our competitors saying they're in china to buy germany. they seem to have forgotten that about 30% of german earnings come from china. so the logic seems to be removed for some fund managers. china does really have a hard landing. it doesn't just impact china. it's going to impact the rest of the world. >> to expand on that periphery, what we're seeing in the markets is a divergence between bond markets and what's going on in equity markets. as far as bond markets are concerned, it looks like we're pricing for a slower global growth outlook right now. is that right or wrong? >> i think what happens last year, the bond market had one of its worst years for quite a number of years. we had a steep increase in yields. this year, we've seen at the
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usual what everybody, the markets tend to go up. everyone is super bullish and markets tend to go down. if you put things into kind of balance, people have a split, have a balance in equities, not just one or the other. >> allen, thank you for your perspective, pat ner at scm private. now, you're looking at pictures of uk foreign minister william hague. we're going to bring you more of his comments shortly. when he did arrive in kiev early this morning, he made the point that the crisis in the ukraine is the biggest crisis in europe in the 21st century, that they've taken control of the crimea peninsula. there's a possibility of further moves by russia into the area of the ukraine and that it creates a very dangerous situation. we'll bring you more on that from him. but for now, let's take a look at some of the other stories making news.
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stateside, tele electrifies long-term investors. the company raised $2 billion in a sale of convertible debt. that's bonds that can be converted to stocks. big investors such as mutual and hedge funds. it's the second biggest sale of convertible bonds in the u.s. in the past two years. tesla was able to raise 25% more than originally planned. the company says it intends to use that money in part for construction of a $5 billion plan to build batteries crucial to expanding its business. apple is set to launch a new in-car irs called car play that will give iphone users a much safer, smarter way to make calls, play music, use maps and access music with a simple word or touch. top tier auto brand is like mere say december, volvo will premier it this week while gm, ford, honda, toyota and others are
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expected to implement car play further down the road. this comes amid a whirlwind of rumors that apple could be eyeing a bid for tesla motors. now "12 years a slave" won big at the oscars last night as steve took home best director. mcqueen lost out on best director to gravity's alfonso ca ro n. jared leto won best actors award. cate blanchett won the award for her role in "blue jasmine." [ male announcer ] meet jill. she thought she'd feel better after seeing her doctor. and she might have if not for kari, the identity thief who stole jill's social security number to open credit cards, destroying jill's credit and her dream of retirement.
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welcome to "worldwide exchange." i'm julia chatterley. these are your headlines from around the world. crisis in the ukraine hits stocks hard. shares in moscow up by more than 8%. russian utility giant gazprom selects a gas price hike for ukraine. european foreign minister sitting down now to discuss how to react to russia's taking control of crimea. we are live in brussels with all the latest developments. more weather hits the u.s., more snow expected to disrupt
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large portions of the east coast while we look at the data on manufacturing, spending and auto sales. warren buffett joins cnbc in about an hour. get involved by #askwarren. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for join onning us here on "worldwide exchange." let me give you a look at how the markets are faring ahead of the u.s. open. and it is the situation in ukraine and russia, of course, will be open occupying forces in the crimea region dominating market sentiment this morning. u.s. equities managing to hold in the green on friday. but that's not the picture we're seeing. we've got the dow futures indicated lower here by 114 points this morning. the nasdaq lower by around 30
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points. and the s&p, similar story lower by 16.50, now taking us back below the 1850 level. let me show you the european markets this morning. red across the board here. not one sector holding in the green. the ftse making further losses in the last half an hour. down by around 1.1%. we've got the german markets lower again by 2.2%. slowing off a bit of positive sentiment on better pmi manufacturing data. the french markets down 1.8% and the italian markets, losses of 1.6%. similar story, risk aversion dominating sentiment as far as the asian equity session was concerned. the noiblg off over 1%. bucking that trend, the shanghai composite. we did see weaker hsbc manufacturing data taking it below that 50 level. a bit of a bounce off the lows as far as that market is concerned to risk aversion as far as the foreign exchange markets are concerned. we are seeing a bid for the dollar here. as you can see behind me,
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euro/dollar, slightly lower. 0.2% there. we've got the yen strengthening versus the do the dollar here, too. bid for gold. concerns about possibly sanctions on russia, too. we've got brent crude here higher by around 1.8% this morning. but the real focus for investors, negative sentiment and honing in on the russian markets here this morning. we've got the micex down 8%. it was down at one point 10.5%. dollar/ruble trading at five-year highs. a lot of concerns as far as gazprom, down around 11% in trading today. now, the latest situation in the ukraine for you. dow jones reporting that russia's special forces have taken control of several border units and the pressure from the military has picked up significantly. meanwhile, eu foreign ministers are sitting down now in brussels to discussion the situation.
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steve sedgwick is in kiev to give us the latest. just how concerned are people on the ground here, steve, about this step up in pressure that we've seen from russia? are they surprised by how quickly putin has moved here? >> i think everybody is surprised. i think you can still see some of the signs, the bloodshed, the violence which took over the trade union building behind me. just literally behind me and to my left is where 97 people got butchered, murdered by forces. so that was only literally two weeks ago. and now an invasion of the country. how much more can one country take in such a short period of time. it was only saturday that putin was getting approval for the
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russian parliament for military intervention. for sunday, the russian military was in the whole of that crimea peninsula. people are astounded by the break neck speed of events. the ukraine government have been responding. they have fully mobilizeded the army. they have reservists, as well. they were telling us earlier possibly 700,000 men could go into arms. but this is a young government. the yanukovych government was being accused of feeding state streets to the russians. in fact, on "squawk box," someone was saying that he believes russian were in possession of military secrets and that the ukraine and military have been downgraded on purpose by this government. now, what they're doing now is
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while they said they're in a full state of military alert, yet they have told their armed forces to resist provocation from the russians. and at the moment, that appears to be holding. if we get an escalation, talking about those border incidents on the dow jones new wires, that is a whole phase of this crisis. this country needs support. back to you. >> a crucial point there. on that note, the russian finance minister this morning saying to prepare a solution on financial aid to cripple ya monday. that's according to the inter fax. they're looking to provide not only military support in the crimea region, but also financial support now. so that's a key message for the likes of the imf and the eu, too. inning us is tina, managing director and senior global political analyst at citi.
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thank you for joining us. you described this as the biggest event in recent years. >> we have a crucial problem here with putin potentially looking to push even ground the crimea. >> yes. the risks to ukraine and its integrity, and also there is a risk of these developments could escalate and possibly impact third world economic recovery. >> it's more broadly than just the ukrainian situation. there are the likes of poland raising concerns about what it's going to mean for the border region, the baltics. >> yes, it is a little bit of a flashback into the cold war era in certain respects. it's a test for the european union, it's a test for nato and it's a test for president obama and the white house. you don't hear anyone talking about military intervention right now, and i think that's vary important point.
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there's no discussion from nato or elsewhere about the need to use military force. but how to respond is going to pose a major challenge. russia is dependent upon european union trade. ukraine's situation is very fragile with an imf mission coming this week. there's a lot at stake. >> but we've seen in the past that putin is not swayed by the threat of sanctions. so actually what can the international community do here to influence premier putin? >> well, putin isn't swayed by the threat of sanctions. i think we saw a pretty strong russian reaction to the registration which targeted certain russian officials and the ability to travel. and that was a fairley modest application of diplomatic sanctions, right, in that instance. i think in this case we'll be talking about much broader kind of use of diplomacy. some of on it is being talked about over the weekend, for
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example, with russia out of the g-8. remember, this is a u.s. elections year with midterms coming up. that's the kind of thing that could have bipartisan support. >> i want to pick up on that point. as far as the u.s. is concerned and obama, this is very different from what we saw as far as iran was concerned. because what i read over the weekend suggests there is popular support for the u.s. to react strongly against russia at this stage. a kind of throwback to the cold war era. this is something people understand at home. would you agree with that? >> well, i think that the public mood in the u.s. is still pretty isolationist. but there is a concern in the u.s. and also in europe that there is a sort of an abdication of u.s. responsibility. it's incredibly delicate. you've got secretary kerry flying to kiev this week. there will be an effort to send messages of support to the new
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government there. no one wants to risk an tooig tag nicing russia. >> i think that is going to be difficult. there is an emphasis financially through the imf. but don't forget that the imf had to have tough conditionality for the eurozone personal space to be seen to be making that commissionlty a lot more advantageous for ukraine, which has very well known problems with the institutions and with corruption. might not be very well received. also, we have an interim government at the moment. one that is not recognized by russia and those new elections that are suppose to take place may 25th might be the sign that the imf needs. >> a lot of crucial points there. tina fordham, manage director
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and senior global political analyst at citi. let's take a look at today's top stories stateside. warren buffett released his annual shareholders letter this past weekend, reporting another monthout year for the firm in 2013. even though berkshire underperformed the s&p 500 for the fifth straight year, the firm boosted propts profits for the record full year and operating profit. courtney reagan will join us with the story in just a little while. now, don't miss u.s. "squawk box" today, the oracle of omaha will be joining becky quick live for three hours starting at 6:00 a.m. eastern. tweet out your questions to him using #askwarren. coming up on the show, we're back out live to kiev for the latest on the ground in respect stay with us. ♪ [ cellphones beeping ] ♪ [ cellphone rings ]
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welcome back to "worldwide exchange." let me immediately bring you up to date. we had the russian foreign minister talking about the situation in ukraine until the last few moments. he's listing western criticism of russia's involvement in the ukraine. the western partners political changes beneficial to them. he says it's against a violation
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of human rights in the ukraine and the global community should remember lessons from the second world war. that's from the russian foreign minister this morning. it also talks about russia beginning preparations to build a bridge across the kee strait to crimea. really getting a sense of how quickly russia continues to move and make judgments here. let's get straight back out to steve in russia. i know it will be interesting to get the official ukrainian response from this, steve. >> yeah. set of the foreign affairs committee, lydia, thank you for joining us. we've just heard comments from the russian foreign minister saying as russian actions were to prevent human rights violations of russian speakers, native russians in the crimea and elsewhere in the ukraine. how do you respond to that? >> it's prop dpan da that is -- unprovoked violence. we are all under -- our country
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has russian citizens, including america. >> so it is propaganda, there is no pretext as far as you can see which would possibly justify putin and russia's actions? >> looking for such a -- but they didn't have any. >> what is important stage next, clearly the ukrainian government is doing all it can to mobilize the forces to prepare itself for potential escalation. but what can the international community do? what is the key here? >> we have to -- this matters to let putin understand that he has to -- in order to -- from ukraine. this is to ask for the whole world, for the civilized world to stop its rhetoric. ukraine is known to be a territory where the first world war and the second world war started.
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we want to get our -- the third world war. >> in terms of perspective, there are many forces in the western parts of the ukraine who want military intervention, who want nato with the 1997 agreement with. they want nato to have some form of military support. that is unrealistic, isn't it? >> we have not only military work going on right now, but we have also diplomatic wars right now. these are the wars we can win. we are relying on you and the whole world to bring pressure from their governments to stabilize the economic situation and to provide with int international support if possible to let putin understand that he has to let ukraine live with its european choices. >> this comes straight from
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parliament. . international pressure, mobilizing the military, what else is the government doing? >> we are trying to coordinate actions in terms of information. we have so many -- information on the pretax and violence against -- a lot of ukrainians and what we are trying to do is to finalize the war and actions. the governments with russia. our government had just two days of peace and it's -- yanukovych spent four years to have our army and security services and -- >> that's what he did, he beheaded your security forces and your army? >> yes. so our plan is to gain the control over our country to provide security to our citizens. it is our --
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>> what do you think the ultimate putin ambition is for ukraine? >> it was once said that russia is impossible without ukraine. it's realistic ambition. and if the world will excuse him such an advance and betray ukraine and ukrainians in these situations, then you have a new hitler heading for europe and heading for world domination. you can stop him, stop him here in crimea, in ukraine. we have to unite on these goals. >> i very much appreciate your comments. i thank you very much, indeed. just saying, as we've heard, the new government here in kiev had two days of peace before this military intervention started. back to you in the studio. >> thanks so much, steve. some chilling comments there. we'll catch up with you later in the show. the russian market tumbles as investors around the world react. u.s. secretary of state john
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kerry flies to kiev while european foreign ministers hold an emergency meeting in brussels. the u.s. east coast suffers yet another wintry blast with some in washington to remain shut today.
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welcome back to "worldwide exchange." let me give you a look at how the u.s. futures are trading ahead of the session today. as you can see, unanimously lower. the s&p 500 indicating lower by just under 16 points. the dow jones lower by 102 points and the nasdaq lower by 28 points. a real dominating theme for sentiment is what's going on in crimea with russian forces occupying that territory. plenty about the progress they continue to make as far as their forces are concerned. but they're talking about preparing to build a bridge from russia to the crimea. so certainly moving very quickly on this story as far as the russians are concerned. the european markets taking their key from the session that we saw in asia to significantly lower here for these european markets. and actually bringing it lower than we were just a few hours ago in the markets this morning. for more breaking news, the eu heads of state to meade meet later this week to discuss the ukrainian crisis.
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we've got the foreign ministers meeting today. now we're talking about the heads of state across the 28 countries in europe meeting later this week. the question is, what can they do? we'll bring you more on that story. but for now, concern over china's economy is growing. hsbc fell to a seven-month low in january. eunice yoon is in beijing. this is part of rebalancing your economy. you're going to have to see a bit of retraction in terms of manufacturing activity. >> you would see a contraction. but at the same time, people are really concerned and are talking about how this is really just a reminder of some of the challenges that the government faces in managing this economy. this week, we are going to see the leadership get together in beijing. they're going discuss the reform agenda. what's interesting here is that these policymakers are making decision necessary a very different growth environment that we've seen in many, many years. people are talking about how the economy is slow and is burdened
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with debt. there were a lot of questions about the financial sector and the health of it. and the government really doesn't have the same levers that past administrations have had in order to try to stimulate growth. so this is a back drop that they are facing at this time. the big question that people are have here going into this congress is just how will the slowing economy play with those reforms? the government has made big announcements at the end of the last week that we were going to make quite dramatic changes in a chinese contest. but we haven't really seen them walk the talk. that's what investors are going to want to see. they're going to want to see serious efforts in progress for the -- for not only the policies themselves, but also the pace of change. >> thanks so much, eunice. we'll watch for that later on this week. now, the u.s. is bracing for another massive late winter snowstorm, this time taking aim at the east coast. forecasters say a layer of ice and 8 to 12 inches of snow will
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be possible by the end of the day in washington and mid-atlantic region while 6 to 8 inches of snow are expected to cover parts of southern pennsylvania. nearly 12 inches of snow may also be seen in parts of new jersey. new york will reportedly get between 1 to 3 inches of snow today. let's give you a look at what's on today's agenda in the united states. the latest personal income and spending report will be out at 8:30 a.m. eastern followed by a couple of key manufacturing numbers shortly thereafter. we'll get an update on construction spending for the month of january and light vehicle sales for the month of february, too. now, mark beesley from helpederson global investors joins me now. matthew, we have auto number of important data points this week, including autos on friday. >> it's absolutely gol going to swam swamp everything.
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therefore, absent specific corporate news, the focus will be on data. as you say, i think this is focused on the ukraine and the ramifications for the world and the different ones there. >> how much of a pullback could we see in markets here? for the u.s. markets, we're talking about record highs as far as trading. so you've got to expect that sentiment is going to be perhaps a little bit more towards profit taking at this stage rather than something else. >> there's plenty of profits for people to take in many different markets. so we've had a very different earnings season which is like most stocks at all-time highs, too. i would expect there to be significant profit taking as the situation moves along. >> quick latest breaking news on the ukrainian crisis. the ukrainian prime minister saying he will never give up crimea to anyone. and that's the back drop for this crisis right now. tension on both sides. we're look at how the futures are trading ahead of the open on
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welcome to "worldwide exchange." i'm julia chatterley. shares in moscow off by more than 8% while russian utility
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giant gazprom threatens gas hike prices for ukraine. now officials are trying to decide how to react to russia taking control of kie crimea. more weather hits the u.s. yet more snow expected to disrupt large waves of the east coast as markets watch for the latest data on manufacturing, construction spending and auto sales. and in an hour's time, warren buffett joins cnbc for an exclusive interview to discuss a record year for berkshire hathaway. you can get involved by #askwarren. if you're just getting
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involved, markets are managing to hold in green territory on friday. but with more taking back today, we've got the dow futures indicated lower by 110 points. the nasdaq lower by around 31 points and the s&p 50014.5 points lower. indicating taking us back below that 1850 level. and the sentiment surrounding what's going on in the ukraine and the crimea region in particular impacting european markets this morning. plenty of commentary from both sides this morning to the ukrainian prime minister saying he will not give up on the crimea region. we've got the ftse 100 lower by just over 1%. german markets down by 2.3%. so pushing further down downside. the cac 40 lower by 1.9% and the italian markets lower by 1 .6%. a lot of the negative sentiment focussing on what we're seeing in the ukraine.
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the micex is lower by 8.9%. weakness in the rushal ruble. gazpron, concerns about the russian sanctions, taking that stock down 10.5%. to bring all these threats together, thousands of russian troops currently on the ground in crimea following a dramatic weekend in the ukraine. the country's new prime minister faces a declaration of war by vladimir putin, saying this morning that he wouldn't give up the crimea region. u.s. secretary of state john kerry will travel to kiev tomorrow for talks with the ukrainian fwoft. >> president putin is using force in a completely inappropriate manner.
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steve, we're hearing the ukrainian prime minister saying he won't give the region up. where does that leave us? >> it leaves us, of course, in a very dangerous situation, julia. this is territory which actually previously back in 1994 the dude pest memorandum, russia was one of the signatories that recognized the territorial integrity and sovereign of the entire country including the ukraine. the russians are saying that events that have overtaken other pieces of law which would record that sovereign pmi, saying at the defending interest of native russians and russian speakers within the ukraine. but, of course, many people have come before us. politicians and indeed representatives of the government who have said it is
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propaganda. one mp said it was global in terms of how wrong that propaganda was, how there was no humanitarian threat at all to the human rights of the native russian speakers in crimea and, indeed, in the east of the ukraine, mainland ukraine which has very large russian speaking population. we also just heard from the secretary of the foreign affairs committee saying the new government had literally two days after the ousting inin ii yanukovych to have a peaceful government. i think it's taking a step back to remind everybody what happened in the last week or so. yesterday i went down to independent square behind me to get a feel for what's going on in the heart of kiev, in the heart of ukraine. let's have a look. everywhere you look in
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independence square, you can see signs of the violence and bloodshed we've seen over the last couple of weeks. this is a living memorial to the horror of the bloodshed that enveloped this country. in my hand, i've got a cobble stone that was part of the defensing for the protesters here in independence square. behind me, you've got the -- that's been in place since yanukovych turned down that eu deal. you can see behind me the former hq of the pro testers. this is a trade union headquarters, which was torched by the yanukovych administration. as we can move forward, we can see the october palace here, as well. this is another hq of protesters standing here in overwhelming approach. behind me, we have the barricade beyond which is majority of the
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97 people who lost their lives in the conflict, mostly between february 18th and february 20th were starting skirmishes with the forces. and then the hotel ukraine which was essentially a mortuary for protesters. that played a huge on part in the protests. steve sedgwick, cnbc, in independence square. >> julia, the only hope we have at the moment is despite this huge rush yab military presence in and around crimea and concerns about build up to the east of the border, there has as of yet been no violence. the government was telling the military not to get involved in any provocations. as of yet, this is -- if i can
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say, it's a peaceful conflikt. there's been no violence, no death as a result of the russian intervention yet. but given the rhetoric on both sides, it's the escalation that everyone fears, as well. if the west doesn't stand up to putin, they fear a much worse and much bigger conflict to come. back to you. >> thanks so much, steve. almost to reinforce that point this morning about finding a resolution to this by peaceful means, angela merkel spoke to them this morning saying it's not too late to resolve this by peaceful means. interesting article in the newark times describing a conversation between angela
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merkel and president obama yesterday describing mr. putin saying not sure he's in touch with reality. give us a bit of perspective. we've seeing the market falling here in europe and we're seeing gold high. but how quickly could investor sentiment turn on this and say, fine, it's just a ukrainian situation, a russian thing, and we can actually -- >> the context, the markets have been precalm over the last two or three months or so. there's very little geopolitical risk. we have some isolated emerging markets. what you see is markets like these are self-contained. where the ukraine is different, the western comes out in support of the government in the ukraine and russia is clearly against that. and so you are pitting west against east here. it's not about the ukraine any more. as investor is on the debt side. ukraine has $135 billion worth
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of external debt owing to people outside of the ukraine. you see a flight away from these from a debt perspective. that, of course, will ultimately have ramifications for the equity market, too. >> how do investors play this? >> if you're investing in global multi national companies, when we hit today, we look across the bourses today to look at germany. there's several companies that share prices fall dramatically because of underlying exposure to the ukraine. >> there's a key credibility question here for the u.s. and how they handle it, particularly for president obama as it comes off the back of the situation we saw in the likes of syria and the involvement in the issue there. are they able to maintain their credibility here by bushing for a very quick bailout solution for the ukraine?
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is that the answer here? >> sure. they want it to go away. i would argue this is a problem that they can't solve. they hope it's another georgia. >> great to get your perspective this morning. matthew beesley, from hinderson global investors. warren buffett's berkshire hathaway sees more record on profits in 2013. more up after the break. also, more of the int international ukraine yaeps's governor. stay with us. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.
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siemens designed and built the right tools and resources to get the job done. welcome back to "worldwide exchange." the russian market tumbles over 10% as investors around the world react to the standoff in ukraine. u.s. secretary of state john kerry fly toes kiev where european foreign ministers hold an emergency meeting in brussels. the u.s. east coast suffers yet another wintry blast. some office necessary washington will remain shut today. further commentary on the
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ukraine this morning on, the ukraine envoy will use all possible means to defense its sovereignty. that's coming from the organization for security and cooperation in europe. want to give you a bit of a perspective on that. the ukrainian prime minister has asked for restraint in this situation and he wants to do this by peaceful means. you have to be a bit careful on the translation, too. warren buffett released his an july shareholder report last weekend. even though berkshire underperformed the s&p 500 for the fifth straight year, the firm boasted both record full year and operating profits. courtney reagan joins us live from cnbc hq with all the details. courtney. >> good morning to you. oracle of omaha has done it again. warren buffett released that annual letter to shareholders this past weekend, which revealed another record year of profit for the firm in 2013.
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despite underperforming for the year, berkshire raked in a full year profit of $19.48 billion. that was an increase of 31% while operating profit was 20% at 15.14 billion. net profit rose nearly 10% to around 5 billion and revenue jumped as the businesses benefited from the improving u.s. economy. buffett wrote, i have always considered a bet on ever rising u.s. prosperity to be close to a sure on thing. he says, quote, though we invest abroad, the mother lode of opportunity still resides in america. buffett indicated that more acquisitions that i well be in the country's future saying he remains on the prowl for bigger guys after two recent purchases of nevada utility nv energy and a $12.52 billion investment in heinz company.
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buffett once again reiterated that he has no intention of leaving berkshire soon. and don't miss u.s. "squawk box" today. the oracle of omaha happen himself will be joining becky quick live for three hours starting at 6:00 a.m. eastern to him. tweet out your questions to him using #askwarren. it always makes for good, good tv. we're always glued to it for those full three hours. back to you. >> thanks, courtney. we look forward to it. the latest personal income and spending reports will be out at 8:30 a.m. eastern. that's going to be followed by a couple of key manufacturing numbers short lfr thereafter. we'll get an update on construction spending for the month of january and like vehicle sales for the month of february. there's some more information on the earnings front. icon enterprises, that's going
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to be out before the bell while we'll have ascena retail reporting later today. the u.s. is bracing for another late massive snowstorm taking aim at the east coast. forecasters say a layer of ice and 8 to 12 inches of snow will be possible by end of the day in washington. whieg in the mid-atlantic region, 6 to 8 inches of snow are expected to cover parts of central pennsylvania. nearly 12 inches of snow may be seen in parts of new jersey. new york will reportedly get between 11 and 3 inches today. the financial times reports george soros and paul paulson have taken an investment plan in
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spania. it will operate as a real estate investment trust, or reit. stephane pedrazzi joins us now where the global foreign stain is under way. i be the discussion is getting spain back on a groekt tract. how much have things been focused on what's going on in ukraine and russia, too? >> it's the main tonic on this consideration. but christine lagarde, the director of the imf made a short statement after the meeting this morning and she talked only about ukraine just to show you that it is not the make topic for this conference, that it's the make topic of conversation on the side of the conference. we're going to talk about ukraine with the vice president of the european commission. thank you very much for being with us here.
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what's your sentiment about the situation in ukraine? >> it's vary tense situation, indeed, with deep confrontation between the ukrainian government and the russian government and russian minorities are putting pressure on russia to help them. but from the european point of view, we are doing our best to reduce tensions, to channel the discussions to diplomatic channel with dialogue. and we can offer to the ukrainian government support that we offered them, very am bishop agreement and we also offer our or services to the russian government to reduce tension to have a positive of stru that is important between ukraine and russia. >> who do you think european leaders should do? >> we are offering our
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diplomatic strength to reduce tensions and regain dialogue attitudes. second, we have a financial capacities together with imf and with other parts of the world. the financial situation is very, very difficult. and we offer ukraine the possibility for western and commercial links and to the economic and diplomatic link wes the european union as other countries in the region are doing. and this is very good. preparations between all the neighbors of the european union. >> regarding the financials, do you think europe should provide financial support regardless of the contribution of the imf? >> no. we are working with imf. we are working together with imf in these kind of operations. we don't have -- as the european union and our eu budget, we don't have, unfortunately, the means to do the task alone.
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member states, korpgzs and also the imf is extremely powerful influence. >> one question about the spanish economic recovery, it's the theme of this conference here. how do you feel about this recovery, are you considering? >> well, the spanish economy has -- the government so we have no more in recession. there is small growth and we need to -- the engines for growth in the spanish economy, not only the financial sector, but also a function of markets, labor markets, services. and we need to strengthen the policies to offer the youth a future. this means create a good environment for investors. we have a lot of things to do. >> thank you very much for being with us here live from bilbao at this conference to promote the
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spanish economic recovery. back to you in london. >> thanks, ste pan. a quick check in the european markets as we head into a break here. adding to lows for the ftse 100 here. the french and german markets losing between 2% and 2.5%. we've got the micex index down by 957%. we have the dollar/ruble trading at five-year highs. i'll leave you with a look at the futures as we head to break. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
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welcome back to this show. ukrainian crisis dominating the issues as far as the urch foous are concerned. ben lichtenstein joins us from the cme in chicago. investors needs to be defensive here as far as the risk events
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in the ukraine are concerned. would you agree we should be buying the dollar here, perhaps two? >> well, yeah, that seems to be a trend. i'm not sure if defensive, maybe less aggressive is a better way to put it. i think that for the most part, we've established clear areas of support on the way up right now. i think you have to give the benefit of the doubt to the bulls. i think the market is weighed on right now main business because of the uncertainty out there. yes, we're seeing money moving into safe havens, if you will, into the dollar and into the bonds. still, for the most part, this is a blip on the radar. as long as it doesn't start to develop into anything larger. at this point, i think having seen the ruffle into all-time new highs, you have to give the benefit of the doubt to the bulls the again, the trend continues to be to the upside. >> as opportunity here for investors if they can sit tight. ben liblthen stein, president of traders audio.com. that's it for today's show. "squawk box" is up next.
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>> announcer: welcome to a special edition of "squawk box." ask warren. legendary investor warren buffett, answering your questions during the entire show. the oracle of the economy, the markets, and much, much more. so tweet, e-mail, get to facebook and get those questions in. "squawk box" begins right now.
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good morning and welcome to "squawk box." i'm joe kernen along with becky quick, kind of. hopefully we've all been boning up on our foreign policy expertise. >> i have been reading up on a lot of that stuff over the weekend. we have a lot of people we'll be talking to about that today. the situation in ukraine is obviously front and center. this morning, i'm in omaha with the legendary warren buffett. good morning, warren. >> good morning. >> great to see you. thank you for being here with us today. >> nice to have you here in sunny omaha. >> in sunny, freezing omaha. we thought it was cold in new jersey, joe, it's about 3 degrees here. berk share hathaway managers ted weschler, todd combs and tracy britt cool. this is a rare appearance. they've never all sat

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